Dangers when buying a website

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Buyers Tip

When buying a website, don't get emotionally attached to the sale.

Always look at a sale objectively and ask yourself "Where is the revenue coming from?" and "If it is so great, why is he/she selling?"

Sellers Tip

When selling a website, build up a relationship with your buyers.

Always talk via PM's. It builds up the number of interactions you have with your buyer which, research has shown, improves trust.

It also leaves the buyers to imagine what stage you are up to in negotiations with other buyers!

A strange thing happens in marketplaces.

It doesn't matter what the marketplace is, this strange phenomenom still occurs.

I call it the marketplace perception gap, and it occurs when a seller explains something to a buyer. It's actually a symptom of incomplete information.

Here's an example.

The seller of a website truthfully states that his website is earning $2k per month. He also says in the site listing that he's had the site for four years and that he will help you to create an affiliate account with his affiliate.

As a buyer, you have a look at his website and start thinking of different ways for growth. You buy the website and once you get it, you make the improvements. You check your stats. Then you check them again. And again and again. By the end of the month, you're not sure why, but the website has performed dismally. What has taken place here?

There seller may have had a number of advantages over you. For example, he could've been earning bonuses from his affiliate program for being around a long time, or he could've been drawing traffic in from one of his other sites.
As a buyer, you're dissappointed. You perceived the $2k per month as the floor revenue. You expected it to be the floor.
The seller hasn't done anything wrong, you haven't done anything wrong, but there's a sour taste in your mouth.

Basically, the seller has stated something which is true, but which the buyer can't replicate.

The moral of this story is to always be aware of your perceptions, and question them thoroughly. What you take for granted from what the seller has said, may not be the case.

There are things you can do to minimise the perception gap.

Firstly, ask questions. Ask where the revenue is coming from. Where is the traffic coming from? The more you know, the less likely you are to have incorrect perceptions.

This is just one of the things to look out for when buying a website.

This section looks at how to minimise your exposure to those dangers. Here is our advice and the articles associated with it: